Aeropostale wins OK of $243 million sale to mall group

Judge calls deal 'a model for future restructurings'

The Gazette
Aeropostale has a factory store in Lindale Mall on Collins Road NE in Cedar Rapids.

The Gazette
Aeropostale has a factory store in Lindale Mall on Collins Road NE in Cedar Rapids.

Bloomberg

Sep 12, 2016 at 3:07 pm | Print View

Teen clothing retailer Aeropostale Inc. won court permission to sell its assets to buyers led by Simon Property Group Inc. and General Growth Properties Inc. after the landlords banded together with liquidators to save jobs and stores — a novel approach that lawyers said could be a template for distressed retailers.

Aéropostale operates a factory store at Lindale Mall in Cedar Rapids and a store in Jordan Creek Town Center in West Des Moines.

General Growth owns Coral Ridge Mall in Coralville.

The group prevailed at a Sept. 2 auction with a $243 million bid and a plan to keep open at least 229 stores. U.S. Bankruptcy Judge Sean Lane approved the sale in Manhattan court Monday after being told by the retailer’s lawyers that the arrangement would save at least 7,000 jobs.

“This could be a model for future restructurings in the years ahead,” Ray Schrock, a lawyer for Aeropostale, told Lane.

Simon was a landlord at more than 160 Aeropostale stores at the time of the New York-based chain’s bankruptcy in May, according to court filings.

When no bids to buy the company as a going concern emerged, Simon and General Growth, also an Aeropostale landlord, started exploring ways to save a key tenant, according to a court filing by Stanley Shashoua, a vice president at Simon.